IMF Proposed Later Adoption Of Romania’s Public Sector Unitary Pay Law – Unions

The head of Romania’s National Union Bloc (BNS), Dumitru Costin, said after the talks that postponing the initial term set for October 31 until after presidential elections would push to adoption of the law to “sometime in 2010" and coasts with this law would increase.

"I think a postponement of the law would lead to increased costs. If the government wasn’t able from January to August to make assessments and see what costs and what jobs can be cut (…) a delay until after election translates into postponing certain decisions to avoid upsetting some politicians,” Costin said.

In turn, the president of union federation Cartel Alfa, Bogdan Hossu, said the IMF proposed a delay to allow for an efficient social dialogue and simulations of how the law would work.

Dumitru Costin said the IMF proposed the basis of the unitary pay law should be an index, not the minimum wage, a proposition the union agreed.

"The minimum wage cannot be the reference because its natural growth would then be endangered and it would entail large-scale wage growth that the economy couldn’t sustain,” Costin said, adding the IMF did not say the government should reduce hierarchy coefficients set in the draft law, but said the current wage grid set in reference to the minimum wage and in ratio to the current number of state employees, goes over budget.

The meeting on Tuesday was also attended by experts of the European Commission and the European Central Bank.

Romania has committed, in its two-years stand by loan agreement with the IMF, to adopt by October 30 a single law regulating wages across the public sector.